DE

It is not at all clear what this stock was doing for nine years from 2008 to the beginning of this year. It could have been a very ugly triangle or a very elongated wave b in an a-b-c 5th wave in a diagonal. We simple do not know!

But, the last wave up from about $67 or so is a clear 5-wave sequence that is peaking. Both RSI and MACD favour this interpretation. So do, I think, fundamentals. If you live in farm country you will know that a tractor, properly taken care of, can last for half a century. Farmers buy these “toys” – they come with every imaginable gadget – when they have the money, not when they need them. This makes these machines truly discretionary and as a result demand can fall off like a rock. This stock should be an excellent short.